The Bangladesh Securities and Exchange Commission (BSEC) sees no option but to delist Mithun Knitting and Dyeing, which has been closed for years, from the stock market.
The Bangladesh Export Processing Zones Authority (Bepza) sold all the assets, including machinery, of the company in an auction this year to clear some of its debts, including the arrears of workers' wages.
Listed on the stock market in 1994, the company, which was later renamed Toyo Knitex Ltd, has been out of production since September 2019.
This correspondent called Company Secretary Mohamad Shohel Rana on his phone several times to enquire about the current status of the company, but there was no response.
On 19 September, the BSEC formed a three-member investigation committee headed by its Additional Director Mohammad Nazrul Islam to look into the overall situation of the company.
The committee has not yet submitted its findings and recommendations to the commission, which is expected to take the final decision based on the report.
Seeking anonymity, a BSEC official said, "Now the company exists only on paper. There are no remaining assets for sale. The company now has no option but to exit the stock market."
He blamed the negligence of the company owners for its dire condition.
"They did not carry out the reforms required by the Accord, an independent agreement designed to make all garment factories in Bangladesh safe workplaces. Then the company was blacklisted. As a result, foreign buyers stopped placing orders," added the official.
After that, dues on gas, electricity, and water bills and the plot lease exceeded several crores of taka. In September 2019, Bepza stopped all services at Mithun Knitting, forcing the owners to close the factory.
Investors were unaware of this fragile state of the company because it did not make disclosures about the price-sensitive information on time.
It is known that the company got listed on the stock market in 1994 without clearance from Bepza. It did not even inform the BSEC while selling the factory.
The factory at the Chattogram Export Processing Zone (CEPZ), which has been in a state of loss since 2017, owes about Tk20 crore to various institutions, including Bepza.
Regarding the sale of the factory, CEPZ General Manager Mofizuddin Bin Mejba said, "Bepza sells a company when it continues incurring losses and fails to pay wage arrears and other dues."
"That's what Bepza has done in the case of Mithun Knitting. The factory was sold a few months ago. The handover process has already been completed," he added.
He said that the workers' salaries and other dues have been paid with the money from the sale of the factory.
"As Bepza's permission was not sought by the relevant regulator for the listing of the company, it was not necessary to inform the regulator about the sale of the factory," he added.
When preparations were on for an auction, its shares of Tk10 were traded at Tk18.80, which is now stuck at the floor price.
Mithun Knitting has an authorised capital of Tk80 crore and a paid-up capital of Tk32.49 crore. The number of its shares is nearly 3.25 crore.
Sponsor-directors hold 17.20%, institutions 17.02%, and general investors 65.78% of the company's shares.